Market Segments

Rolling Settlement

In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day.

At NSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day. For arriving at the settlement day all intervening holidays, which include bank holidays, NSE holidays, Saturdays and Sundays are excluded. Typically trades taking place on Monday are settled on Wednesday, Tuesday's trades settled on Thursday and so on.

Limited Physical Market

Pursuant to the directive of SEBI to provide an exit route for small investors holding physical shares in securities mandated for compulsory dematerialised settlement, the Exchange has provided a facility for such trading in physical shares not exceeding 500 shares. This market segment is referred to as 'Limited Physical Market' (small window). The Limited Physical Market was introduced on June 7, 1999.

Salient Features of the Limited Physical Market

Trading is conducted in the Odd Lot market (market type 'O') with Book Type 'OL' and series 'BT'.

Order quantities should not exceed 500 shares.

The base price and price bands applicable in the Limited Physical Market are same as those applicable for the corresponding Normal Market on that day.

Trading hours are the same as that of the normal market and order entry during the pre-open and post-close sessions are not allowed.

Settlement for all trades would be done on a trade-for-trade basis and delivery obligations arise out of each trade.

Activity

Day

Trading

Rolling Settlement Trading

T

Clearing

Custodial Confirmation

T+1 working days

Delivery Generation

T+1 working days

Settlement

Securities and Funds pay in

T+2 working days

Securities and Funds pay out

T+2 working days

Post Settlement

Assigning of shortages for close out

T+3 working days

Reporting and pick-up of bad delivery

T+4 working days

Close out of shortages

T+4 working days

Replacement of bad delivery

T+6 working days

Reporting of re-bad and pick-up

T+8 working days

Close out of re-bad delivery

T+9 working days

Orders get matched when both the price and the quantity match in the buy and sell order. Orders with the same price and quantity match on time priority i.e. orders which have come into the system before will get matched first.

All Good-till-cancelled (GTC)/Good-till-date (GTD) orders placed and remaining as outstanding orders in this segment at the close of market hours shall remain available for next trading day. All orders in this segment, including GTC/GTD orders, will be purged on the last day of the settlement.

Trading Members are required to ensure that shares are duly registered in the name of the investor(s) before entering orders on their behalf on a trade date.

Institutional Segment

The Reserve Bank of India had vide a press release on October 21, 1999, clarified that inter-foreign-institutional-investor (inter-FII) transactions do not require prior approval or post-facto confirmation of the Reserve Bank of India, since such transactions do not affect the percentage of overall FII holdings in Indian companies. (Inter FII transactions are however not permitted in securities where the FII holdings have already crossed the overall limit due to any reason).

To facilitate execution of such Inter-Institutional deals in companies where the cut-off limit of FII investment has been reached, the Exchange introduced a new market segment on December 27, 1999.

The securities where FII investors and FII holding has reached the cut-off limit as specified by RBI (2% lower than the ceiling specified by RBI) from time to time would be available for trading in this market type for exclusive selling by FII clients. The cut off limits for companies with 24% ceiling is 22%, for companies with 30% ceiling, is 28% and for companies with 40% ceiling is 38%. Similarly, the cut off limit for public sector banks (including State Bank of India) is 18% whose ceiling is 20%. The list of securities eligible / become ineligible for trading in this market type would be notified to members from time to time.

Salient Features of the Institutional segment

Trading in this market segment is available for institutional investors only. In order to ensure that the overall FII ceiling limits are not violated, trading members shall be allowed to enter sell orders in this market segment only for their FII clients. However, members can enter buy orders on behalf of FII/FI clients.

Trading takes place under series type 'IL' under market type 'N'

The minimum tradable quantity in this market is 1.

Trading shall be done on T+2 rolling settlement basis only. Settlement of transactions shall be on dematerialised mode only

The base price and the price bands applicable for this segment are the same as those applicable for the corresponding normal market on that day.

In case of buy/sell orders, members shall be required to enter the custodial participant code at the time of order entry. Members shall not be allowed the facility of trade warehousing for the IL Market segment.

Note: As per circular number NSE/CMTR/37880 dated May 30, 2018 trading in IL series has been discontinued w.e.f July 01, 2018 in Capital Market segment.

As per the SEBI circular, when the aggregate shareholding of all the QFIs in a company reaches 8% of the equity paid up capital, the company’s name along with ISIN shall be published in caution list by the depositories and no fresh purchases shall be allowed without prior approval of the depositories. SEBI also advised Exchange to develop separate segment for intra QFI transactions in the equity shares of companies in the caution list, if QFI wish to buy without the prior approval of the depositories.

To facilitate QFIs to trade in companies where the caution limit of QFI investment has been reached and QFI wish to buy without the prior approval of the depositories exchange has introduced new market segment w.e.f. March 20, 2012.

Salient Features of the Institutional
QFI segment

Market Parameters

Series

IQ

Market Type

Normal Market

Lot Size

Same as Normal Market

Base Price & Price Band

Same as Normal Market

Eligible Securities

As mentioned in Caution list by Depositories

In order to ensure that the overall QFI ceiling limits are
not violated, trading members shall be allowed to enter sell
orders in this market segment only for their QFI clients.

All other provisions applicable to different market
segment (or type) shall also be applicable mutatis-mutandis to
this market also.

QFI transactions in IQ series executed on behalf of
Qualified Foreign Investors shall be cleared and settled on a
net obligations basis within the sub-segment. Settlement of
all transactions shall compulsorily be done in dematerialised
mode only. All transactions in IQ series shall be settled
under settlement type ‘N’. Settlement Guarantee shall be
provided.

A cash market member may trade and settle the transactions
done on behalf of QFIs based on the client codes. The
assessment and collection of STT on such trades (EQ and IQ
segment) will have to be at the rate applicable to delivery
based transactions.

Trade for Trade Segment

The scrips in Trade for Trade segment are made available for trading under BE series. The settlement of scrips available in this segment is done on a trade for trade basis and no netting off is allowed. The criteria for shifting scrips to/from Trade for Trade segment are decided jointly by the Stock Exchanges in consultation with SEBI and reviewed periodically.

The process of identifying the securities moving to Trade for Trade segment is done on a fortnightly basis while securities moving to/from Trade to Trade is done on a quarterly basis. This review is applicable to all securities irrespective of Price Bands.

Fortnightly Review for shifting securities to Trade to Trade:

The detailed fortnightly review criteria for shifting of securities to Trade for Trade segment is given below. The securities satisfying all the Criteria shall be transferred to Trade for Trade segment.

Price Earnings Multiple (P/E)

Price Earnings Multiple (P/E) less than 0 or greater than or equal to upper limit # subject to a minimum of 25 as on the relevant date.

(# If Nifty P/E on the relevant date is in the range of 15-20, then the upper limit will be 30. If Nifty P/E >20 or <15 then the difference rounded off to nearest number will be added to or subtracted from 30). AND

Price variation

Fortnightly Price Variation is greater than or equal to Sectoral Index* or Nifty 500 Index Fortnightly Variation plus 25% subject to a minimum of 10%.

(*In case a particular Sectoral Index is available only on one exchange the other exchange shall also use the same to compare price variation in securities of the concerned sector for the purpose of shifting to Trade for Trade segment). AND

Market Capitalisation

Less than equal to Rs. 500 crores as on relevant date.

Exceptions:

The following securities shall be excluded from the Fortnightly review process:

Securities with Dynamic Price Bands.

Newly listed securities (IPO) and the securities which are made available for trading in Trade for Trade segment for the first 10 trading days with applicable price band, while keeping the price band open on the first day of trading as per SEBI circular bearing no SEBI/Cir/ISD/1/2010 dated September 2, 2010.

Securities transferred out of Trade for Trade settlement to Rolling settlement as per quarterly Trade for Trade Review Exercise will not be considered in immediate following fortnightly Trade for Trade review for shifting it back to Trade for Trade.

Quarterly Review for shifting securities to / from Trade to Trade:

Securities satisfying the following criteria on the date of review shall be shifted to Trade for Trade. The securities satisfying any of the following criteria A, B, C or D shall be transferred to Trade for Trade segment.

Criteria A

Price Earnings Multiple (P/E) less than 0 or greater than or equal to upper limit # subject to a minimum of 25 as on the relevant date AND

Price Variation greater than or equal to 25% plus Sectoral Index* / Nifty 500 variation in the last 2 fortnights; subject to a minimum of 10% AND

Volatility greater than three times Nifty volatility over a period of 6 fortnights. Volatility is computed as standard deviation of log normal close to close returns.

OR

Criteria B

Price Earnings Multiple (P/E) greater than 0 but less than the upper limit # subject to a minimum of 25 as on the relevant date AND

Price Variation greater than or equal to 50% plus Sectoral Index / Nifty 500 variation in the last 2 Fortnights AND

Volatility greater than three times Nifty volatility over a period of 6 Fortnights.

OR

Criteria C

Criteria C shall be applicable to securities with a market capitalization of less than 2 times of the market capitalization** arrived at for the review

Average daily volume variation for 2 Fortnights over previous 2 Fortnights greater than 200% + Average volume variation of Nifty 500 constituents. (computed as average of average volume variation month over month across the constituents as on relevant date, rounded off to the nearest 5%), subject to minimum of 200% (average daily volume in the recent 2 Fortnights being more than 1000 shares) AND

Concentration (Gross Purchase plus Gross Sales) of Top 10 Clients on the basis of PAN during the 2 Fortnights more than 25% AND

Price Variation greater than or equal to 25% plus Sectoral Index / Nifty 500 variation in the last 2 Fortnights, subject to a minimum of 10%.

OR

Criteria D

Number of non-promoter shareholders less than 500 as per the latest shareholding pattern available with the Exchange.

(# If Nifty P/E on the relevant date is in the range of 15-20, then the upper limit will be 30. If Nifty P/E>20 or <15 then the difference rounded off to nearest number will be added to or subtracted from 30).

(*In case a particular Sectoral Index is available only on one exchange the other exchange shall also use the same to compare price variation in securities of the concerned sector for the purpose of shifting to Trade for Trade segment).

(**Market capitalization threshold shall be linked to the Nifty / Sensex movement between December 01, 2003 taking base as Rs. 200 crores and present quarterly relevant date (after rounding off to the nearest Rs. 50 crores of higher of Nifty / Sensex movement) but restricted to an upper limit of 500 crores.)

Securities moving out of Trade for Trade segment would be placed under 5 % price band until the next review for upward revision of Price bands.

Dropping Criteria:

The following dropping Criteria shall be applied on the securities eligible to move to Trade for Trade as per above Criteria:

Market Capitalisation is greater than Rs. 500 crores as on relevant date AND

Institutional Holding is more than 20% OR

Securities where company is paying dividend or issued bonus shares (and no dividend) in at least two out of last three years.

Exceptions:

The following securities shall be excluded from the Quarterly review process:

Securities with Dynamic Price Bands.OR

Newly listed securities (IPO) and the securities which are made available for trading in Trade for Trade segment for the first 10 trading days with applicable price band, while keeping the price band open on the first day of trading as per SEBI circular bearing no SEBI/Cir/ISD/1/2010 dated September 2, 2010. OR

Securities transferred to Trade for Trade segment as per immediate preceding fortnightly Trade to Trade Review Exercise will not be considered for review for shifting it back to Rolling Settlement.

Revision in Trade for trade

Block Trading Session

The SEBI vide letter MRD/DoP/SE/Cir - 19/05 dated September 02, 2005 and CIR/MRD/DP/118/2017 dated October 26, 2017 guidelines outlining a facility of allowing Stock Exchanges to provide separate trading window to facilitate execution of large trades. The Exchange has introduced new block window mechanism for the block trades from January 01, 2018.

Following are the features of Block Trades :

Trading will be conducted in the Odd Lot market (market type 'O') with Book Type 'OL' and series 'BL'.

a) Morning Block Deal Window: The reference price for execution of block deals in this window shall be the previous day closing price of the stock.

b) The reference price for block deals in this window shall be the volume weighted average price (VWAP) of the trades executed in the security in the cash segment between 01:45 PM to 02:00 PM. In case no trades are executed in the security in the cash segment between 01:45 PM to 02:00 PM, the reference price shall be considered as follows-

VWAP based on trades executed in the security between 9:00 am to 1:45 pm shall be taken as reference price. For the computation of VWAP, the trades of pre-open / special pre-open session as the case may be, shall also be considered.

In case VWAP is not available as per above, then the previous day’s adjusted close price / base price shall be considered as reference price.

The Exchange shall calculate and disseminate/ broadcast the applicable price range for the execution of block deal between 02:00 PM to 02:05 PM on the trading terminal.

The minimum order size for execution of trades in the Block deal window shall be Rs.10 Crore.

Orders will get matched when both the price and the quantity match for the buy and sell order. Orders with the same price and quantity will match on time priority i.e. orders which have come into the system before will get matched first.

Market orders are not allowed for BL series.

The orders placed shall be within ±1% of the applicable reference price in the respective windows as stated above.

Post Close Session

In accordance with SEBI letter SMD/Policy/9916/2003 dated May 20, 2003 notifying scheme / guidelines outlining a facility of providing Trading Session after normal market hours in Capital Market Segment, 'Closing Session' has been introduced by the Exchange from June 16, 2003.

Salient features of Post Close Session are as follows:

Closing Session is available only in Normal Market Segment.

Timings will be 3.40 PM to 4.00 PM

Only market price orders are allowed.

Trading will take place at single price i.e. close price of a security.

Special Terms, Stop Loss and DQ orders are not allowed.

Trades will be considered as Normal Market trades.

The post close session facility is available to all the securities which are eligible for trading in Normal market in CM segment. However, if securities not traded in the normal market session will not be allowed to participate in the Closing Session.